Foot Locker made waves late last month when the retail giant shared that the amount of Nike product in its stores would be significantly less.
As a result of Nike’s “accelerated strategic shift to DTC,” Foot Locker stated during the call to announce its Q4 earnings that no single vendor in its stores would represent more than 55% of total supplier spend beginning in Q4 2022, down from 65% last year. The retailer also posted a challenging outlook for 2022, stating it expects sales to fall between 4% and 6% and same-store sales falling by 8% to 10%.
In the wake of the announcement, sneaker consumers and others expressed fears that they might no longer be able to buy Nike products at Foot Locker, despite the fact that the announcement was a reduction — not an elimination — of product. Much of this was brought on by an image that circulated on social media sharing false information that the Swoosh was pulling its footwear from Foot Locker altogether.
“The [incorrect] ‘news’ [in the misinformation meme] was initially met with a mix of skepticism and joyfulness. Some were skeptical because the general consensus is that [Nike’s app] SNKRS is still unfair in how they select who gets a shoe. Other people were happy because they felt they had a fair shot with getting sneakers that historically would get back-doored at Foot Locker stores,” sneaker YouTuber David “Kari” Daniels explained. “When something major breaks involving a large brand like Foot Locker, the community always seem to branch into two buckets: People that believe a company like Foot Locker is too big to fall and people who think Nike no longer needs the retailers.”
The confusion got so out of hand that Nike president and CEO John Donahoe addressed the shifting strategy with Foot Locker in the company’s Q3 earnings call this week.
“To be crystal clear, Foot Locker always has been and always will be a large and important partner of Nike,” Donahoe said. “And that will continue to be the case. And they’ll have a very distinct role in our marketplace strategy as a wholesaler, with a particular focus on the culture of basketball, on the sneaker culture and on kids, which is a really big and important opportunity for us.”
In an email statement to FN, Foot Locker doubled-down on Donahoe’s statement and the importance of the relationship.
“Nike is a great partner, and we continue to have a strong, long-standing relationship. There are opportunities for us to work together and grow our business in basketball, kids, and sneaker culture while continuing to create unrivaled customer experiences,” said Foot Locker, Inc. EVP and chief commercial officer Andrew Gray.
Foot Locker’s statement echoes what chairman, president and CEO Dick Johnson said in an interview with FN last month.
“We’re going to continue to fuel the basketball category with them,” Johnson told FN. “We’ve got great growth opportunities in kids, so a broader kids’ assortment. Apparel continues to be a strong opportunity. They’re very supportive of our positioning around sneaker culture.”
Foot Locker also has outlined a plan to diversify its vendor assortment and lean into other brands that show signs of promise. Reebok, which was acquired by Authentic Brands Group from Adidas in a deal that closed last month, is positioned as a major opportunity for Foot Locker in 2022. Foot Locker and ABG have inked an exclusive arrangement for the retailer to carry certain Reebok shoes in U.S. stores and websites.
The partnership will make Foot Locker the exclusive distribution channel for certain hot Reebok products, such as signature basketball shoes from retired NBA icons Allen Iverson and Shaquille O’Neal.